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Hoping Chefs Will Melt for Tcho Chocolate

ALL summer and fall, as candidates battled across the country, a different campaign was being waged in the restaurant kitchens of New York.

The chief strategist was not a politician, but rather a middleman: John Magazino. In recent months, he has presented samples of a new high-end chocolate called Tcho to 40 or 50 of the city’s premier pastry chefs.

He’s offered them a taste. Discussed cost and melting points. Proffered bulk samples. And some chefs listened. Others were wholly uninterested, or forgot that they’d ever tried it. “And some chefs were so busy they didn’t have the time to taste it,” he said.

At stake is a toehold in the lucrative American market for millions of pounds of gastronomic chocolate, a sumptuous food-service product that is used by pastry chefs and bakers in white-table restaurants and by fine chocolatiers.

Tcho also makes chocolate bars, in gold-embossed wrappers, that are sold in some Whole Foods stores, Macy’s, Garden of Eden and 5,500 Starbucks across the country. But the retail market is saturated and insanely faddish, so the company hopes that its chances with consumers will be helped if the chocolate is adopted by chefs in New York.

“There is no other concentration of great restaurants like there is in New York,” said Louis Rossetto, chief executive of Tcho. “To be able to be successful in that market gives us credibility around the country, and around the world.”

Tcho hardly lacks resources. Mr. Rossetto and Jane Metcalfe, the company’s president, founded Wired magazine, which was sold to Condé Nast for some $80 million in 1998. Subsequently, Lycos bought the rest of the company, Wired Digital, for more than that amount.

The battle will be won less by high-concept million-dollar public-relations campaigns than by direct contact. It is a struggle, one chef at a time, restaurant by restaurant. Tcho is but one of dozens of new small-batch chocolate wannabes that clamor for the attention of high-end chefs who already rely on a half-dozen well-entrenched competitors, most notably Valrhona.

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Restaurant-grade chocolate is made at the Tcho factory in San Francisco. The company is trying to win over pastry kitchens.Credit
Jim Wilson/The New York Times

David Liederman, a battle-scarred chocolate-war veteran who founded David’s Cookies and then sold the company in 1996, said, “It is a tough road for Tcho — it’s almost impossible to make inroads in the U.S. market.”

He explained: “That’s because tradition is so ingrained in the chefs. Not only do you have to give away vast quantities of chocolate, and do marketing, but you also have to hold the hands of pastry chefs, educating them to get their loyalty.”

These days, fine chocolate is the product of an arcane international culinary mélange of trade arbitrage, genetics, technology, biology, farming, politics and artful fermentation that winemakers might applaud.

Gastronomic chocolate — most of it dark — was only a sliver of the $16.9 billion United States chocolate market in 2009, according to the National Confectioners Association. The American subsidiary of Valrhona, by all accounts the player to beat, estimated that the market for such chocolate in the New York metropolitan area alone is $20 million to $25 million. Other companies’ private estimates say it is larger.

In restaurants, “Chocolate will always sell,” said John O’Neill, a senior vice president at the Patina Group who buys chocolate for Lincoln, the Sea Grill and La Fonda del Sol. “I defy anyone to find a restaurant menu without chocolate, and there aren’t too many ingredients you can say that about.”

In the world of fine chocolate, pastry chefs rely on a handful of brands, including Amedei, Domori and Vestri, from Italy; Valrhona and Michel Cluizel, from France; Barry Callebaut, Felchlin and Lindt, from Switzerland; and Guittard, an American contender.

“But Valrhona is the gold standard,” said Johnny Iuzzini, the executive pastry chef for the last eight years at Jean-Georges.

The privately held Valrhona, which does not release revenue figures, has been dominant in the campaign for chefs’ loyalty. Since 1988 Valrhona has had a French training center — L’Ecole du Grand Chocolat — next to its factory in Tain L’Hermitage, 70 miles south of Lyon.

The school offers intensive three-day courses taught by 15 chefs in nine languages including English, Japanese, Russian, Italian, Spanish and German. The instruction costs 1,000 euros, or $1,387 (some students receive housing stipends and other assistance), and attracts 1,200 professionals each year. The company even employs two pastry chefs to provide technical support to the trade in the United States.

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Chocolate is placed in boxes at the Tcho factory on Pier 17 in San Francisco.Credit
Jim Wilson/The New York Times

“It will be interesting to watch Tcho,” said Pierre Cantrel, director of sales for Valrhona in the United States and Canada. “Clearly they are targeting our customers. But Tcho doesn’t have the product range, the different flavors. Their product isn’t there yet.”

Tcho’s creators beg to differ. The company, which sold its first chocolate in 2009, is privately held and will not reveal its revenue, except to say that sales have already reached into the millions over the last several years, according to Ms. Metcalfe, Tcho’s president. “By 2012 we hope to be profitable,” she said.

Crucial to that ambition is Tcho’s strategy of undercutting its rivals. Its gastronomic products sell for from $6.50 to $8.50 a pound, roughly 30 percent less than Valrhona’s. “We are trying to be the highest quality chocolate at a competitive price in that high-end sector,” Ms. Metcalfe said, “sort of the way that Lexus came into the United States market competing against Mercedes and BMW.”

Tcho is also taking on a neighbor, a privately owned 140-year-old San Francisco brand, Guittard, whose upscale food-service product, E. Guittard, can cost $4 to $5 a pound — less than Tcho.

“The rubber meets the road where flavor is concerned,” said Gary Guittard, the company’s president, a fourth-generation Willie Wonka. “I get uncomfortable with someone new that has a huge P.R. campaign.”

But some are getting comfortable with Tcho. Frederick Aquino, the executive pastry chef at the Standard Grill in Manhattan, still uses Valrhona and Michel Cluizel, but now finds that Tcho is “my all-purpose chocolate,” he said. He even uses it for the restaurant’s signature dessert — the Deal Closer, a chocolate mousse layered with devil’s-food cake.

Or, as Brooks Headley, the executive pastry chef of Del Posto and “a die-hard Valrhona chef for years,” said: “What excited me is that Tcho is made in the United States. And the fact that it’s more affordable? Well, see you later, Valrhona.” Tcho is now his chocolate of choice for cakes, truffles and gelato.

Rather than label chocolate by its origin or by its percentage of cacao, Tcho categorizes its products by their dominant flavors: floral, earthy, nutty, fruity, citrusy and chocolatey. On a recent afternoon in the kitchen of Sorella, an Italian restaurant on Allen Street, the pastry chef, Yarisis Jacobo, opened a two-kilo bag of Tcho. She proceeded to experiment with those flavors in making new chocolate truffles, sorbets and milkshakes for Stellina, the restaurant’s forthcoming pastry shop and gelato bar next door.

Tcho is already Sorella’s go-to chocolate. Emma Hearst, Sorella’s executive chef and an owner, said, “Aside from the quality, we like that it’s smaller and more artisanal — and the price point doesn’t hurt.” Valrhona? “French, schmench,” she said with a laugh.

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Tcho chocolate is being used in the kitchen of Sorella, an Italian restaurant on Allen Street in Manhattan.Credit
Rebecca McAlpin for The New York Times

But Mr. Iuzzini isn’t yet ready to commit. “You can’t just substitute one chocolate for another,” he said, adding that the chemistry of tempering and crystallization, and the general kitchen performance of chocolate, “is very tricky.” He has tasted Tcho. “I’ll throw it in the mix and do side-by-side comparisons,” he said.

This is necessary, Mr. Iuzzini said, because his team makes 14,000 chocolates for bon bons and petit-fours every few weeks in nonstop seven-hour sessions in the restaurant’s temperature-and-humidity-controlled chocolate room. “It is a huge investment if it goes wrong,” he said. “You cannot experiment.”

The name Tcho — simply a catchy phonetic rendering of the initial syllable of the word chocolate — “is meaningless,” Mr. Rossetto said. And despite Mr. Magazino’s efforts, so far it doesn’t mean that much to some chocolate luminaries. “I’ve not heard of it,” the Manhattan-based chocolatier François Payard said of Tcho. “E. Guittard is the only one in America that succeeds for me.”

Nor has Jacques Torres formed an opinion of Tcho, but he cautioned that “a lot of the startups trying to enter the high-end market disappear.” Mr. Torres, the dean of pastry studies at New York’s French Culinary Institute, who makes his own bean-to-bar chocolate in his Manhattan factory, added, “You need a big fortune to make a fortune in chocolate.”

After Mr. Rossetto, 61, and Ms. Metcalfe, 48, who are work and life partners, sold their Wired businesses, “Jane and I were making angel investments in companies and became obsessed with chocolate,” Mr. Rossetto said. “It finds you, and in a sense, you can’t not do it.”

The Tcho challenge is emphatically ambitious. Its founders hope to emulate the global success of new-world winemakers.

“We took direction from the Europeans for a long time, until we asserted ourselves in thinking: how good can we make things here?” Mr. Rossetto said. “As with wine in America, it was time to apply a higher level of intelligence to the process of making chocolate.”

The company says it has brought high-tech efficiency and streamlined production to a primitive traditional business. It insists that its price differential is a result of those changes, and is “not an arbitrary low price to capture market share,” Mr. Magazino said.

The company says that its beans from cooperatives in South America are certified fair trade and organic, but that beans from plantations in Madagascar are “ethically sourced,” or produced under a system of humane treatment of workers, and agricultural sustainability.

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The company’s partners, Louis Rossetto and Jane Metcalfe.Credit
Jim Wilson/The New York Times

Tcho says it works with farmers to help them improve the quality of their cacao — and thus improve their income.

At some farming cooperatives, the company has installed Macintosh computers, solar-powered monitoring cameras and portable laboratories to check the texture and flavor of new crops, and to permit the production of chocolate batch samples — an unusual practice in countries where some cacao farmers have never tasted chocolate.

“We monitor the labs from San Francisco, we’re in contact on the Internet, and give them feedback,” Ms. Metcalfe said.

Its program for growers, called TCHOSource, has been successful enough to attract a $3.3-million, five-year grant from the United States Agency for International Development, so its operations can expand from 200 Peruvian farmers to those in Ecuador and the Dominican Republic.

And Tcho invokes the social-responsibility mantra in its sales pitch. “Ethical sourcing is a major concern for chocolate consumers, so this program is not only securing our flavor beans, it’s also securing our customer loyalty,” Ms. Metcalfe said.

Nevertheless, Tcho’s acceptance in the vital New York restaurant market has everything to do with the chocolate seduction of Mr. Magazino, 40, who started as a national truffle, caviar and foie gras salesman.

Horrifyingly, Mr. Magazino found himself starting Tcho amid one of the hottest New York summers on record, delivering chocolate to top chefs in cooler-bags with gel packs. “Luckily, the chocolate didn’t have a meltdown in the heat,” Mr. Magazino said. “But I nearly did.”

Mr. Magazino’s company, Primizie Fine Foods, inhabits a 5,500-square-foot warehouse near the Hunts Point Market in the Bronx that has been visited by Michael White, Andrew Carmellini and other chefs. His nickname is Johnny Warehouse (because that’s what his last name, with an extra z, means in Italian). Distribution “is a personal business, it’s all about relationships,” he said. “And in the end, this business is all about your credibility.” But he also has a secret advantage.

“Chefs are always, always looking for something new,” he said. “They call us and say, ‘What have you got?’ Well, this is new. And we’ve got it.”

A version of this article appears in print on November 3, 2010, on Page D1 of the New York edition with the headline: Hoping Chefs Will Melt. Order Reprints|Today's Paper|Subscribe